US automotive supplier Johnson Controls is about to take over the Keiper Recaro Group, famous for vehicle seats (both commercial and passenger vehicles) as well as metal seat frames and structures and those RECARO bucket seats that we all love. An agreement for the sale of Keiper Recaro Group was entered into between Putsch GmbH & Co. KG, the holding company for Keiper Recaro and Johnson Controls. Most may not have heard of Johnson Controls, but they actually are market leaders in automotive car interiors (dashboards, consoles, door trims, etc)and electronics (the integration of electronics into interiors) with 130,000 employees in 1,300 locations on 6 continents.

Not many have actually heard of Johnson Controls. Before actually knowing that they are one of the major players in the automotive industry I always thought of them to be either a pharmaceutical company or they did something related to pest control. This was a good couple of years back.

Anyway, if approval by anti-trust authorities is given for the sale to be carried out, the passenger and commercial vehicle lines under Keiper Recaro will be under Johnson Controls while Recaro Aircraft Seating, Recaro Child Safety (child safety seats) and home/office furniture manufacturer Recaro Home will not be included as part of the sale. What basically happens is that Putsch Holding (the previous owners of Keiper Recaro) will retain the rights to the Recaro brand but Johnson Controls are given a long term license for the exclusive worldwide use of the brand for automotive and commercial seats.

The reason for the sale is that Keiper Recaro’s owners concluded that the company would develop better under the “umbrella of a worldwide leading company far better than they would as a medium sized enterprise”. They may be right as a company as global as Johnson Controls which has factories and share-holding in factories around the world can assist them in opening up new sales channels and markets (especially in China, India and the United States – where Johnson Controls are market leaders). The reason Johnson Controls wants Recaro is that this will give them access to a world famous brand and an expansion to their own interior product range.

The sale does not include the activities of the Keiper subsidiary Brasil Ltda., which is being continued as an independent company under the auspices of Putsch Holding, Johnson Controls will take over a total of 13 sites with 4,750 employees in Europe, North America and Asia. This includes Keiper Recaro’s main plants in Germany: Remscheid, Rockenhausen, Kaiserslautern and Kirchheim/Teck.

With estimated sales for 2010 at 750 million Euros, the sale wasn’t surely for the lack of business, merely the reason of expansion and I get the feeling that the main shareholders want to cash-out (a little) and retire happily on some Caribbean island sipping a drink with an umbrella in it.